Environmental

Social
Governance
2020
Sustainability Accounting
Standards Board (SASB) Report
At Netflix we aspire to entertain the world, with best in class
stories across a wide variety of different genres and languages.

Because as we’ve learned over the years, great stories are universal: they can come from anywhere
and be loved everywhere. It’s why we’re so excited to offer creators a global platform for their shows
and films and members a window onto the world through the breadth of our programming.

But as we grow—we now have more than 200 million members—we recognize that our
responsibilities increase too. So we’re focused on ensuring that: more people can see their lives and
cultures reflected on screen; our employee base and the creators we work with are as diverse as the
communities we seek to serve; we contribute to the local creative communities in which we operate;
and we minimize our impact on the environment.

Below is our second report covering our environmental, social, and governance (ESG) performance.
It looks back at the previous year and gives investors as well as other stakeholders information
about our broader impact in society. The report will focus on what’s material to our business and our
industry using the Sustainability Accounting Standards Board (SASB) framework as a benchmark.

SASB guidelines differ depending on the industry. This report provides ESG
information for the 2020 calendar year, referencing SASB’s reporting framework for
the “Internet & Media Services” and “Media & Entertainment” industries. For more
information on SASB, visit www.sasb.org.

Editor’s Note 04/21/2021: We’ve updated page 2 in the Environmental section of this report
with more detail on the accounting metrics.

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If we are to succeed in entertaining the world, we need a habitable, stable world to entertain.
So by the end of 2022, Netflix will achieve net zero emissions— putting our internal emissions
reductions on a 1.5°C science-aligned pathway and bringing the remainder to zero through
projects that remove carbon from the atmosphere.

TOPIC ACTIVITY METRIC - INTERNET 2019 2020 SASB CODE

MEDIA & SERVICES
ENTITY-DEFINED Subscribers 167 million 204 million TC-IM-000.A
MEASURE OF USER
ACTIVITY

TOPIC ACCOUNTING METRICS - 2019 2020 SASB CODE

INTERNET MEDIA & SERVICES
ENVIRONMENTAL Total energy consumed (MWh)1 21,816 26,196 TC-IM-130a.1
FOOTPRINT
OF HARDWARE Percentage grid electricity 100% 100%
INFRASTRUCTURE
Percentage renewable 100% 100%

ENVIRONMENTAL Total energy consumed (MWh) 59,320 68,089

FOOTPRINT OF
REMAINING SCOPE 2 Percentage grid electricity 100% 100%

Percentage renewable 100% 100%

Discussion of the integration of environmental TC-IM-130a.3

considerations into strategic planning for data center needs

1. SUSTAINABILITY AT NETFLIX

The science is clear—stabilizing the climate is necessary to ensure a habitable world

for this generation and those to come (link). Given the need for action, we have made
environmental sustainability a key issue within Netflix, and in the past year:

•  Established a Sustainability Office under our Chief Financial Officer and hired Emma
Stewart, Ph.D., our first Netflix Sustainability Officer,
•  Developed a strategy with our Co-CEOs, CFO, and VP Public Policy, and briefed our
Board of Directors,
•  Assigned our ESG reporting to our VP Corporate Controller, who also oversees our
financial reporting. This will help ensure that our ESG reporting benefits from our
financial and internal audit protocols,
•  Enlisted our Independent Accountants (EY) to conduct a limited assurance of our 2020
Scope 1 and 2 emissions,
•  Incorporated climate change risk in our enterprise risk management.

1
Only includes scope 2 hardware infrastructure, i.e. Netflix-operated Open Connect Appliances in colocation data centers, which represent
approximately 1/10th of scope 2 and 3 data center electricity use (all Open Connect and AWS combined).

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In developing our program at Netflix we have benefited from the insights and research of
more than 60 experts across the world, including:

•  Climate Outreach
•  ENGIE Impact
•  Environmental Defense Fund
•  Fraunhofer IZM
•  Global Optimism
•  Lawrence Berkeley National Laboratory
•  Natural Resources Defense Council
•  Potsdam Institute for Climate Impact Research
•  Rare
•  University of Bristol
•  University of California Santa Barbara
•  United Nations’ Framework Convention on Climate Change
•  WWF

We have also established an independent Advisory Group of Experts who’ve volunteered

their time to advise us on the best approach to sustainability at Netflix. The Group
is composed of individual experts and institutional representatives selected for their
leadership and deep knowledge across scientific and sustainability topics:

•  Dr. Johan Rockström, Director of the Potsdam Institute for Climate Impact Research
•  Christiana Figueres & Tom Rivett-Carnac, co-architects of the Paris Agreement and
founders of Global Optimism
•  Dr. Katharine Hayhoe, Chief Scientist, The Nature Conservancy and Distinguished
Professor and Chair, Texas Tech University
•  Kelly Kizzier, VP Global Climate, Environmental Defense Fund
•  Derik Broekhoff, Senior Scientist, Stockholm Environment Institute
•  Marcene Mitchell, SVP Climate & Tim Juiliani, Corporate Engagement, WWF
•  Xiye Bastida, youth activist and winner of Spirit of the UN award

Public Policy - In the United Nations’ Paris Agreement we see the clearest intersection
of where science meets policy. We endorse the Paris Agreement’s goal to limit global
warming to below 2°C, preferably to 1.5°C, compared to pre-industrial levels. In 2021,
we joined the America is All In, a cross-sectoral consortium committed to execute against
those goals.

Our Carbon Footprint - In the past year, we measured our greenhouse gas (GHG)
footprint, known colloquially as a carbon footprint, for both 2019 and 20202. Our
Independent Accountants (EY) reviewed our 2020 Scope 1 and 2 emissions (their report
here). This exercise helped us understand where our largest sources of emissions lie and
the biggest opportunities we have to reduce them. Netflix’s footprint is 1.1 million metric
tons (MT) in 2020. The footprint declined from 2019 to 2020 mostly due to delayed
content productions during the COVID-19 pandemic.

2
As of 1st January 2019, Netflix’s greenhouse gas (GHG) emissions reporting is consistent with the operational control approach as set out by the
GHG Protocol Corporate Accounting and Reporting Standard: Revised Edition (2004). The organizational and operational boundary applies to the
global company including its subsidiaries, the office and studio facilities we own and operate (e.g. Netflix Albuquerque Studios, USA) as well as
facilities we lease from others but over which we have meaningful operational control (e.g. corporate and studio offices and stages).

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Our Carbon Footprint (continued) - The following table shows Netflix’s annual carbon
footprint totals using both market-based and location-based emissions accounting
methods as defined by the GHG Protocol Scope 2 Guidance. The location-based figures
are calculated based on the emissions intensity of the locations where the electricity
consumption occurs. A market-based method incorporates electricity procurement
decisions that companies have chosen, such as provider-specific electricity supply and
contractual instruments such as renewable energy certificates (RECs).

2019 MTCO2e 2020 MTCO2e

Scope 1 51,487 30,883

Scope 2 (market-based) 565 141

Scope 2
26,594 28,585
(location-based)

Scope 33
1,192,659 1,020,541
(market-based)4

Scope 35 1,234,935 1,067,778

Total
1,244,711 1,051,564
(market-based)

Total6 1,313,016 1,127,245

Greenhouse
(36,506) (54,107)
Gas Offsets

Total Net Emissions

1,208,205 997,457
(MTCO2e)

Adjustments to the 2019 estimates - In our report last year, we disclosed our 2019
electricity use and corporate travel emissions, including:

•  Both direct and indirect electricity use (e.g. that used by data center providers like AWS),
which was matched with renewable energy certificates.
•  Air travel, where we matched the majority of air travel emissions calculated at the time of
that report with high-quality carbon offsets.

3
This includes categories 1-4, 6-7, and 13, as defined by the GHG Protocol Scope 3 Guidance.
4
We applied RECs to Scope 3 emissions where we had information on the specific energy consumption by location (e.g. for our Open Connect
network) because this is the most appropriate match of a contractual instrument to known energy consumption (source).
5
Scope 3 emissions are location-based except where individual suppliers provided supplier specific emissions that are market-based (e.g. AWS).
Netflix works with individual suppliers, wherever possible, to determine that any renewable contractual instruments applied to their emissions are
appropriately attributed.
6
Total Scope 1, Scope 2 location-based, and Scope 3 before the application of any renewable energy or other contractual instruments.

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With this report, we improved our greenhouse gas (GHG) data collection and footprint
measurement process, which now includes a much broader boundary. Specifically, we
expanded our Scope 3 boundary to include the emissions associated with our corporate
and production purchased goods and services, capital goods, transport and delivery
services, fuel- and energy-related activities, employee commuting and downstream
leased assets, in addition to business travel. As a result, the current estimates of the 2019
footprint are higher than the initial analysis last year.

Footprint Components - Netflix is an entertainment company. Approximately half of our

footprint lies within the physical production of our Netflix-branded content (“content”),
followed by our corporate operations and purchased goods (“corporate”), followed by our
data center providers (“streaming”).

Content: 50%
Corporate: 45%
Streaming: 5%

Figure: Netflix’s 2020 company carbon footprint by business activity.

Methodology: How we calculate our footprint - All GHGs covered by the Kyoto Protocol
(Annex A) relevant to Netflix are accounted for and converted into metric tons of carbon
dioxide equivalents (MTCO2e) as specified by the GHG Protocol (GHG Protocol, 2004).7

Data - We keep our various data sources in different formats. To improve our GHG data
management, we have implemented a process to collect any business activity data. There
are certain categories of documents that are to be retained by specific groups within
Netflix, following our Practices and Policies.

7
All emission factors are applied to the data and updated annually to reflect the latest guidance and factors published by EPA eGRID2018 (EPA, 2020)
and The Climate Registry (TCR, 2019). In some cases, where data may not be available or of sufficient quality, Netflix will use proxy data, industry-
average figures or rely on experts. In such instances, we use third-parties for reliability and completeness.

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Our Target Boundary - In setting our climate targets, we included all Scope 1 (direct)
and Scope 2 (indirect emissions) as well as all relevant8 Scope 3 categories, even though
in many categories we have limited operational control. This means that we include all
owned Netflix-branded content production, whether we manage the production directly
(like The Midnight Sky), or through a third-party production company (like Our Planet, Bill
Nye Saves the World, or You vs. Wild) as well as all content that we license that is Netflix-
branded (like My Octopus Teacher or An Inconvenient Sequel). Our limited operational
control presents challenges to measuring and reducing emissions from the productions we
don’t manage directly, but we believe taking responsibility for the emissions from Netflix
branded content (wherever it is produced) will create a positive ripple effect across the
industry.

Internet Transmission & User Device Energy Use - What is not included in our Scope 3
boundary are emissions from the internet transmission or electronic devices our members
use to watch Netflix, like an Apple tablet, Android phone, or Samsung television. GHG
accounting guidance does not yet exist for streaming companies on this topic. Current
best practice is for the internet service providers and device manufacturers to account for
those emissions within their target boundaries, because they have operational control over
the design and manufacturing of their equipment9.

While these emissions don’t fall within our company footprint, we’ve joined with other
streaming companies to measure them via DIMPACT, a collaborative research initiative
that has created a life cycle footprinting tool to assess the operational emissions of video
streaming, as well as for other internet uses like publishing and advertising. Led by a
technical research team at the University of Bristol’s Computer Science department, this
effort represents best-in-class research to gain consensus on footprinting methodologies,
third-party data sources, and required company data, improving upon others’ efforts in
the past which lacked all three and unfortunately produced high overestimates. We have
entered and validated our own data through the tool, and estimate one hour of streaming
on Netflix in 2020 to be well under 100gCO2e, equivalent to driving a gas-powered
passenger vehicle 1/4 mile (400 meters). These results are consistent with industry peers
and validated by our Advisory Group of Experts, with Carbon Trust publishing a White
Paper on the topic this spring. We are glad to support these cross-sector efforts to help
everyone better understand the footprint of streaming.

In addition, we’re also encouraged by Apple, Microsoft, Sony and others’ commitments to
tackle their devices’ emissions during use, and Telefonica, Deutsche Telekom/T-Mobile,
Vodafone, and others to decarbonize their networks, and we are encouraging others to
follow their example.

8
The boundary was established in alignment with the GHG Protocol Corporate and Scope 3 Standards.
9
Per the GHG Protocol, the most common method by which to allocate emissions to one company or another is called “operational control method”
(page 18 of the Protocol).

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2. NET ZERO10 + NATURE

In 2018, the Intergovernmental Panel on Climate Change (IPCC)’s “Global Warming of

1.5°C report” concluded global temperature rise must not exceed 1.5°C above pre-
industrial temperatures to avoid the worst impacts of climate change, including irreversible
damage and deeper inequality between rich and poor. To achieve this, global annual GHG
emissions must roughly halve (i.e. drop by 45%) by 2030 – and drop to net zero by 2050.

Netflix will act to Reduce, Retain, and Remove Carbon in concert with Nature to achieve
net zero emissions by the end of 2022, and every year thereafter.

A. Reduce our emissions: We’ll start first by reducing our internal emissions in line with
science, specifically the Paris Agreement’s goal to limit global warming to 1.5°C. This
means we will reduce Scope 1 and 2 emissions by 45% by 2030, per the Science-Based
Targets Initiative Guidance.

B. Retain existing carbon storage: By the end of 2021, for emissions we can’t avoid
internally, we’ll fully neutralize them by investing in projects that prevent carbon from
entering the atmosphere, starting with conserving at-risk natural areas like tropical forests.
Scientists are clear we cannot meet global climate goals without protecting critical
ecosystems, especially this decade (IPCC Special Report on Global Warming of 1.5°C).

C. Remove carbon from the atmosphere: Lastly, by the end of 2022, we will incorporate
investment in the regeneration of critical natural ecosystems in order to achieve net zero.
These projects, such as restoring grasslands, mangroves, and healthy soils, remove and
store carbon from the atmosphere, in addition to other benefits.

CARBON
EMISSIONS

A. REDUCE C. REMOVE
our internal emissions carbon from the atmosphere
in line with science by regenerating natural
(~45% by 2030) ecosystems
NET ZERO = A+C
(standardized definition
forthcoming from NGOs)

B. RETAIN
existing carbon
storage in at-risk
natural ecosystems
CARBON
REMOVALS

BY END OF 2021 BY END OF 2022

10
Netflix recognizes that guidance on criteria and timing for voluntary corporate Net Zero claims is not currently available. We are committed to
following the best scientific guidance available and will adjust our target if needed in the future.

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This is the beginning of our climate journey, and we will continue learning from the
sustainability community, evolving our strategy as the science, math and technology
evolve. We recognize the need for a standardized definition of “net zero” that sets criteria
for boundary setting, timeframes and other topics. In the meantime, we’ve designed our
target to reflect the highest ambition possible in accordance with best practice in net zero
target setting, and as advised by our Advisory Group of Experts. We commit to evolving
our net zero activities to meet a recognized global standard when one becomes available.
In the meantime, our target aligns with the latest guidance from Oxford University and we
are listed among the United Nations’ and Science-Based Target Initiative’s BUSINESS
AMBITION FOR 1.5°C group of companies that are setting net zero targets in line with a
1.5°C future.

A. REDUCE our internal emissions in line with the science

Our plan to reduce Netflix’s carbon footprint is aligned with the scientific guidance on
limiting global warming to no more than 1.5°C. We therefore set out to reduce Scope 1
and 2 emissions by 45% by 2030 from a 2019 base year11.

We plan to achieve this using a three-step process: optimize, electrify, and decarbonize.

•  Optimize: We focus first on achieving operational efficiencies, ensuring the easiest and
often most cost effective reductions are achieved first.
•  Electrify: Then, because electricity is easier to decarbonize than liquid fuels, we will
transition away from fossil-fuel energy sources where possible and replace them with
electric power, or zero-emissions fuel sources.
•  Decarbonize: Lastly, we will buy 100% renewable and additional electricity where
possible, or renewable fuels where electrification proved infeasible.

We apply these three steps first where we have greatest operational control, which is
primarily studio facilities we own (Alburquerque) or master lease agreements (e.g. Madrid
Content City in Spain), and then where we have influence, like in our long-term corporate
office leases or preferred vendors (e.g. in transportation, building materials, etc.). We
implement key sustainable best practices, inspired by sustainable guidelines such as
albert and BREEAM in the UK, and LEED and the PGA/Sustainable Production Alliance’s
GreenProductionGuide.com in North America. Examples of the types of practices we will
scale to reduce carbon emissions from fuel and electricity use across our footprint include:

11
2019 is the first year a comprehensive GHG inventory was completed, and is therefore our baseline.

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CONTENT CORPORATE STREAMING

CREATION OPERATIONS DELIVERY

OPTIMIZE Hire local crew to Provide employee Install content

avoid travel and commuting options delivery caches
lodging. (shuttles, transit close to members,
passes, van pools, etc.) reducing traffic
on transmission
networks

ELECTRIFY Install additional Offer free charging Already 100%

power at stages and and parking for electrified.
use clean and silent electric vehicles.
mobile battery units,
reducing the need for
diesel generators.

DECARBONIZE Opt into local Install onsite Encourage data

renewable energy photovoltaics and center and other
programs to power 100% renewable technology partners
offices. energy green tariffs to continue
in select locations. decarbonizing their
energy supply and
disclose details to
their customers.

Renewable Electricity
We aim to use 100% renewable electricity to power our global operations. In 2020, we
expanded the scope of our electricity use data capture and ensured compliance with the
Greenhouse Gas Protocol. In 2019 and 2020, we procured 100% renewable electricity
where possible, including directly from electricity service providers in select regions,
as well as by purchasing Renewable Energy Credits (RECs) in the markets where the
electricity was consumed.

Against our 2020 footprint, Netflix retired renewable energy contractual instruments
such as RECs for electricity use in the following countries: Argentina, Australia, Austria,
Belgium, Belize, Brazil, Canada, Chile, Costa Rica, Finland, France, Germany, Hong Kong,
Hungary, India, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Poland,
Romania, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, United Arab
Emirates, United Kingdom, and the U.S.

•  In the U.S., we matched at a state or grid-region level. Elsewhere, we matched by

country or by grid-connected markets. In-market credits are not yet available in South
Korea, which we hope will be addressed (South Korea represents approximately 0.1%
of Netflix’s electricity use). With our data center providers, if they provided sufficient
evidence that their electricity loads were already served by renewable energy, we did not
purchase RECs, a standard practice.

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•  Where possible, we purchased RECs for electricity use from operating our Open
Connect program, our purpose-built content delivery network. We store our content
library on Open Connect Appliances—caching servers which are placed in major Internet
Exchange locations throughout the world. We also provide Open Connect Appliances
to Internet Service Providers free of charge for placement within their networks, greatly
reducing the amount of upstream network capacity required for ISPs to deliver Netflix
content. For example, instead of streaming Bridgerton from our California headquarters
to a home in the UK, Netflix places a copy of Bridgerton at a nearby UK location site so
it gets to the UK member more efficiently. Although some servers are hosted within ISP
networks, we account for the emissions of those as well.

We lease 95% of our office and stage space, so we’re not always able to procure
renewable electricity directly. However, we are exploring ways we can bring new renewable
electricity generation to regions we operate in by investing in new projects and products.
We can do this in various ways, like working with our landlords around on-site renewable
electricity generation, utility-provided green power options, and investing in off-site
renewables projects.

B. RETAIN existing carbon solutions

The IPCC Special Report on Global Warming of 1.5°C (IPCC 2018) underscores that
the goals of Paris are not feasible without reversing human impacts on forests and other
land systems across the globe to ensure they absorb more CO2 than they emit within
the next decade. So Netflix commits to Retain carbon each year by conserving at-risk
natural areas. By the end of 2021, any emissions we cannot reduce internally will be
addressed through investment in high quality climate action projects through the voluntary
carbon markets. These projects protect natural ecosystems that retain existing carbon
stocks because they deliver critical benefits for fighting climate change, while protecting
ecological health and disadvantaged communities. If these ecosystems are lost, much
of the carbon they store becomes “irrecoverable” on timescales relevant to avoiding
dangerous climate impacts (Goldstein et al 2020), and the communities who depend on
them for life and livelihood will be imperiled.

Among the projects we’re investing in is the Lightning Creek Ranch project in the State of
Oregon, preventing the loss of North America’s largest bunchgrass prairie. The investment
would help landowners prevent farming that land and enhance natural carbon removal
systems.

The Oregon Grasslands Project

(photo courtesy of The Nature
Conservancy and Aaron Huey)

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Another is the Darkwoods Forest Carbon Project in British Columbia, Canada, a vast
expanse of rare inland temperate rainforest which provides habitat for numerous species,
including grizzly bear and wolverine, managed by the Nature Conservancy of Canada.

In Kenya, we’re supporting the Kasigau Corridor REDD+ Project, which protects over
500,000 acres of dryland forest and is home to more than 300 threatened or endangered
species, including 11,000 elephants. The project provides economic alternatives
to unsustainable activities such as poaching, slash-and-burn agriculture and illegal
harvesting for charcoal, resulting in benefits for 120,000 community members.

The Kasigau Corridor

REDD+ project (photo
courtesy of Filip Agoo)

C. REMOVE carbon from the atmosphere

To complement our internal reductions, we will bring to net zero remaining emissions
through investments in “emissions removals” with an emphasis on regenerating natural
ecosystems that actively Remove carbon from the atmosphere. To reiterate, investment in
these activities will not be a substitute for internal decarbonization action, but undertaken
in addition to those efforts. This strategy follows the Oxford Principles for Net Zero
Aligned Carbon Offsetting, released in September 2020.

A subset of our Advisory Group of Experts was handpicked to advise on our Retain
and Remove work. They serve as “friendly critics” testing our vetting and verification
processes and evaluating our final project investment selections with scientific rigor.
We will release a more detailed discussion of our methodology and project portfolio and
selection process when our annual procurements are complete.

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3. SUSTAINABILITY IN STORYTELLING

Sustainability is an epic story. It’s one creators are already telling at Netflix, while we work
to make storytelling itself more sustainable. In 2020, 160 million households around the
world chose to watch at least one story on Netflix that shined a light on sustainability.
These are titles that entertain and deepen our appreciation for the planet, help viewers
better understand the issues and hopeful solutions around sustainability, or both. Stories
included Netflix originals like Our Planet and My Octopus Teacher, to classics like The Day
After Tomorrow and Chasing Coral.

Some of these titles won both popular and critical acclaim, a recognition for creators and
a sign of how sustainability is very much part of entertaining the world. As examples, 100
million households have tuned in to Our Planet since its release in April 2019. The 2019
docuseries on the interdependency of Earth’s systems and living creatures, narrated
by David Attenborough, won two Primetime Emmys, among other awards. Earlier this
month My Octopus Teacher was nominated for an Oscar after winning a Critic’s Choice
Documentary Award and International Documentary Association Award.

Many artists are motivated by the stories, characters, and importance of environmental
stories. We will continue to invest bringing their stories into our programming.

4. COLLABORATING ACROSS BOUNDARIES

We will continue to rely on a community of partners to pave the way for our industry and
those industries we partner with.

TOGETHER WITH THE ENTERTAINMENT INDUSTRY

We learn from and share work with the following organizations:

•  albert: We joined albert’s sustainable production project in 2018, and multiple UK Netflix
productions have engaged with albert’s industry offering.
•  Sustainable Production Alliance: We joined the alliance in 2019, using the tools and
resources available at GreenProductionGuide.com across multiple Netflix productions.
•  Drawdown Labs (part of Project Drawdown): We are one of the founding companies for
this consortium, which incubates solutions to climate beyond “net zero.”
•  DIMPACT: Earlier this year, we joined this initiative to monitor and map the entertainment
and media industry’s digital carbon footprint. The collaborative project is supported
by world-class researchers from the University of Bristol, who have created a tool to
calculate the emissions of video streaming.
•  Natural Resources Defense Council: We have invited communication and policy experts
from NRDC’s Rewrite the Future to advise us.

TOGETHER WITH OUR VALUE CHAIN PARTNERS

Since we define our target boundary broadly, we lean on partners in our value chain to help
us achieve decarbonization faster. Some of the key areas include:

Physical Production: We include all Netflix-branded content in our climate target, whether
we manage its physical production or not. Our emissions reduction target for production
includes emissions from energy (fuel and electricity), travel (air, hotels, and commuting),
and the broader production supply chain such as material purchases (costumes, props, set
materials), equipment rentals (cameras, lighting, vehicles) and digital and post production
services (visual effects, editorial).

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We cannot transform the content production industry alone, so we will work with our
partners, suppliers and peers to realize a less carbon intensive production process.

Data Centers: Like many, we use cloud providers like AWS and co-location data centers
to deliver streaming. We include emissions from these providers in our climate target
boundary for emissions. We also work with Internet Service Providers to deliver the
highest-quality members experience through servers hosted closer to the user through
our Open Connect program. This is also highly energy-efficient, because in storing
content closer to our members, we’re able to:

•  Avoid building and maintaining international networks, which can be incredibly carbon-
intensive. It involves laying infrastructure over long distances — through land or
underwater,
•  Avoid congesting the Internet traffic loads of routers (the internet’s switches) when a film
or TV episode makes its journey to the viewer, and
•  Use less data by delivering content to members from a location closer to them.

In addition, we are working with our data center providers to understand their energy and
carbon footprint and targets.

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To entertain our members, who come from all around the world, we need to work with a diversity of
creators as well as have a diverse workforce.

TOPIC ACTIVITY METRIC - 2019 2020 SASB CODE

MEDIA & ENTERTAINMENT
TOTAL RECIPIENTS Subscribers 167 million 204 million SV-ME 000.A
OF MEDIA AND
THE NUMBER OF
SUBSCRIBERS

TOPIC ACCOUNTING METRICS - 2019 2020 SASB CODE

MEDIA & ENTERTAINMENT
MEDIA PLURALISM12 Percentage of gender and racial/ethnic group representation SV-ME-260a.1
for management, professionals, and all other employees

Women (Global) 47.1% 47.1%

Women in management (Global) 47.4% 47.8%

Black/African Americans (US) 6.7% 8.0%

Black/African Americans in management (US) 7.3% 9.0%

Hispanics/Latinx (US) 7.7% 8.1%

Hispanics/Latinx in management (US) 4.2% 4.9%

Asians (US) 24.2% 23.9%

Asians in management (US) 15.9% 15.7%

American Indian/Alaska Native (US) 0.3% 0.20%

American Indian/Alaska Native in management (US) 0.0% 0.0%

Native Hawaiian/other Pacific Islander (US) 0.5% 0.5%

Native Hawaiian/other Pacific Islander in management (US) 0.3% 0.1%

Middle Eastern/North African (US) 0.5% 0.6%

Middle Eastern/North African in management (US) 0.1% 0.4%

Description of policies and procedures to ensure pluralism SV-ME-260a.2

in media content

12
Categories based on mostly U.S. reporting requirements. They do not capture our growing diversity around the world, as laws on
collecting race and ethnicity data differ outside of the U.S. Representation data compares October 2019 to October 2020. The 2020
numbers account for 8,000 full-time streaming employees and does not include certain employees engaged in content production,
some of whom are part-time or temporary, and whose numbers fluctuate throughout the year.

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Great storytelling not only entertains but can also challenge prejudice and increase
empathy and understanding.

Stories like Bridgerton, Selena: The Series, Da 5 Bloods, Atypical, Blood & Water and The
Half of It broaden representation—enabling more people to see their lives and cultures
reflected on screen.

Better representation on-screen starts with representation behind the camera and in the
office. To understand our progress, we asked Dr. Stacy L. Smith, the founder and director
of USC Annenberg Inclusion Initiative, to study our U.S.-commissioned films and series
over a two-year period from 2018 to 2019. She and her team are renowned for their work
in this field, including the Inequality in Popular Films reports, which examines portrayals
of gender, race, LGBTQ+ identities and disability on screen across the entertainment
industry.

The report, published earlier this year, analyzes the makeup of Netflix’s on screen talent
as well as our creators, producers, writers, and directors. While it’s clear Netflix has made
significant progress year over year, we still have a long way to go:

•  Of the 22 inclusion indicators measured for film and series, 19 showed an improvement
year-over-year. We are outpacing the entertainment industry in hiring women and
women of color directors in films, and women creators in series. This had a positive
impact in front of the camera: we achieved gender equality in leading roles across our
films and series and exceeded proportional representation of Black leads, co-leads and
main cast across the two years that were examined.
•  But not all racial/ethnic groups saw their representation increase during the period of
the study. For example, we have notable representation gaps behind and in front of the
camera for Latinx, Middle Eastern/North African, American Indian/Alaskan Native, and
Native Hawaiian/Pacific Islander communities—as well as gaps in Asian representation
behind the camera. And we still have work to do in increasing representation of the
LGBTQ+ community and characters with disabilities.

We will release a report every two years, from now through 2026. And look to do similar
studies in other countries around the world. Our hope is to create a benchmark for
ourselves, and more broadly across the industry.

We recognize our progress is dependent on creating more opportunities for people from
underrepresented communities to have their voices heard. So we’ve focused on closing
capacity and skill gaps with training programs where they are needed. In February, we
announced the creation of the Netflix Fund for Creative Equity. We will invest USD $100
million dollars over the next five years in a combination of external organizations with a
strong track record of setting underrepresented communities up for success in the TV
and film industries, as well as bespoke Netflix programs that will help us to identify, train
and provide job placement for up-and-coming talent globally. The first $5 million will
go towards programs that expand access for women—from workshops to train aspiring
female writers and producers on how best to pitch their creative vision, to shadowing
opportunities on productions that enable women to gain valuable first hand experience.

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The new fund complements other investments we’ve been making to find and train
new, young talent, like our commitment to the Ghetto Film School, Film Independent
Project Involve, Firelight Media and Black Public Media to help foster Black creators.
We also teamed up with the Los Angeles Latino International Film Festival’s Latinx
Inclusion Fellowship Series, which mentors Afro Latinx directors. We supported these
efforts outside the U.S. as well. In Canada, we created a mentorship program with
imagineNATIVE to support Indigenous directors, producers, and screenwriters, like Kiley
May. We’ve also been working to develop training programs on our series like Top Boy in
the UK and 3% in Brazil, which both invited diverse aspiring directors on set to shadow
the filmmaking process. To open access to documentary filmmaking, we partnered with
Ghetto Film School on a fellowship program that gives up-and-coming documentary and
nonfiction filmmakers a major career boost, particularly for people of color.

Inclusion at the company

We’ll find more stories and better improve our service if our employees come from
different backgrounds, and if we create an environment of inclusion for them. Since 2013,
we’ve published diversity data quarterly on our jobs site, but we wanted to go deeper. So in
January 2021, we published our first company inclusion report. Read the full report here.

Much has been written about Netflix’s culture of freedom and responsibility. But the
most important thing we’ve learned is that when you pair that culture with diversity and
inclusion, it unlocks our ability to innovate, to be creative, to solve problems. By bringing
different lived experiences and perspectives to existing challenges, you can solve them in
new ways.

One example is the idea to redirect a portion of our cash into Black banks and similar
institutions that serve low- to moderate-income communities. The idea came from
Aaron Mitchell, a director on our Talent team, who had long been passionate about ways
companies can narrow the racial wealth gap, fueling social mobility and opportunity
for these communities. He teamed up with Netflix Treasurer Shannon Alwyn to evolve
this idea into a commitment: Netflix would redirect two percent of our cash holdings—
approximately $100 million—to these institutions. Shortly after, other companies joined
the movement to “bank Black,” leading to more than $1 billion in similar commitments.

We’ve made progress on representation but have more work to do:

•  Women make up half of our workforce (47.1%), including at the leadership level:
directors and above (47.8%), vice presidents (43.7%) and senior leadership (47.6%).
•  Nearly half of our U.S. workforce (46.4%) and leadership (42.0%), director level and
above) are made up of people from one or more underrepresented racial and/or ethnic
backgrounds, including Black, Latinx or Hispanic, Indigenous, Middle Eastern, Asian,
and Pacific Islander backgrounds.
•  The number of Black employees in the U.S. doubled in the last three years to 8% of our
workforce and 9% of our leadership (director level and above).

We’re increasing representation by expanding our inclusion recruiting programs team,

who coordinate this work. They train recruiters on how to hire more inclusively, help the
company and senior leaders diversify their networks, and create programs like the Netflix
and Norfolk University HBCU tech bootcamp to create access to emerging talent.

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Once we attract talent to Netflix, we want them to feel represented in all aspects of the
company. Our 15 employee resource groups (ERGs) create a sense of community for
people with shared experiences (e.g., veterans, Indigenous, Black, parents, people with
disabilities, Latinx, Asian). We work to improve our company practices around pay and
benefits to be as equitable and inclusive as possible.

•  Equitable Pay: We practice “open compensation,” which means the top 1,000 leaders
(directors and above) at the company can see how much any employee is paid. This
encourages open discussions about pay disparities. Outside of the transparency, our
talent team routinely analyzes pay across the company to look for disparities, including
an annual compensation review. In both cases, when we find pay gaps, we rectify them.
•  Inclusive Benefits: Our flexible parental leave policy is gender-blind. We offer a family
forming benefit to support employees on their fertility, surrogacy, or adoption journey. It’s
available to employees regardless of marital status, gender, or sexual orientation. And we
cover comprehensive transgender and non-binary care in our U.S. health plans. Outside
of the U.S., we’re exploring how we can expand transgender coverage.

We want employees to look at every decision with an “inclusion lens,” so that they’re
embracing difference, spotting bias, and considering a decision’s impact on marginalized
groups. We run workshops to raise consciousness of topics like privilege, bias,
intersectionality and allyship, which became important during the pandemic and racial
reckoning of 2020.

Issues around inclusion and diversity vary by department, so we have inclusion leaders
embedded with the different teams (e.g., marketing, product, and content). Examples:
Content, production, and marketing focus on representation issues. Product is focused on
increasing employee representation of women, Black and Latinx in technology roles.

As we look to the future, we want to improve recruiting Hispanic or Latinx, Indigenous and
other underrepresented people, learn about inclusion topics in societies outside of the
U.S., and measure how well we’re doing on inclusion.

Impact of Covid-19
The COVID-19 pandemic hit lower paid workers in the entertainment industry— who are
often self-employed and work project-to-project—hard, especially during the initial lock-
downs last Spring when production ceased. So we established a $150 million hardship
fund to directly support the hardest hit workers in the creative community in 20 countries
around the world where we have a large production base—helping tens of thousands of
workers across the industry. For example, we paid people on our own paused productions
for six to eight weeks, and also worked with third parties to support existing funds, or
create new ones, to deal with hardship in the broader industry.

As Joanna Mae Park, a costume designer on the original series Pieces of Her, said, “the
fact that Netflix has realized that there’s people’s lives behind this content and they’ve
made an effort to support us, when they didn’t have to, is really admirable.” Additionally,
Italian Film Commissions president Cristina Priaron remarked, “In such a moment where
everybody is requested to make special efforts, the Italian film commissions, being
dynamic and ‘on the ground’, together with Netflix, will provide relief to the hardest hit
workers by the stop of the productions due to the COVID-19 pandemic. It is a remarkable
opportunity for us to partner with Netflix and to be able to service the audiovisual
community; devoting this fund to the active workers is a meaningful action, and we hope
other players in our industry will join us on this.”

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Netflix has led the industry in safety standards for production, wrapping hundreds of
productions worldwide since the start of the pandemic, and providing thousands of good
paying, middle class jobs. We continue to work closely with health organizations, labor
unions, and federal, state, and local authorities to monitor the situation and assess the
safest standards for our production operations around the world.

TOPIC ACCOUNTING METRICS - 2019 2020 SASB CODE

INTERNET MEDIA & SERVICES
DATA PRIVACY, Description of policies and practices relating TC-IM-220a.1
ADVERTISING to behavioral advertising and user privacy
STANDARDS &
FREEDOM OF Our service is subscription-based and we do not
EXPRESSION allow third-party advertising on Netflix. When
members sign up for the service we ask for very
little information: email, name and method of
payment. We do not collect socio-demographic
data like gender or race for the purposes of our
viewing recommendations system. Our Privacy
Statement provides a detailed explanation of our
privacy practices, including: the information Netflix
collects or receives from each member; how we
use and disclose it (including advertising that we
conduct off Netflix to promote our service); and
the controls each member has in relation to this
information.

Number of government requests to remove 2 4 TC-IM-220a.6

content, percentage compliance with requests

We offer creators the ability to reach audiences all

around the world. However, our catalog varies from
country to country, including for rights reasons
(i.e., we don’t have the rights to show everything in
every country where we operate). In some cases,
we’ve also been forced to remove specific titles
or episodes of titles in specific countries due to
government takedown demands.

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Social

ACCOUNTING METRICS - 2019 2020 SASB CODE

INTERNET MEDIA & SERVICES
DATA PRIVACY, Number of government requests to remove 2 4 TC-IM-220a.6
ADVERTISING content, percentage compliance with requests
STANDARDS & (continued)
FREEDOM OF
EXPRESSION Below are the titles we removed in 2020— 4 in
total since our last report in February 2020. We
report these takedowns annually.

•  In April 2020, we complied with a written

demand from the Radio and Television Supreme
Council (RTUK) in Turkey to remove one episode
- “Family Ties”- from the series Designated
Survivor in Turkey only.
•  In May 2020, we complied with a written
demand from the Singapore Infocomm Media
Development Authority (IMDA) to remove the
series Cooked with Cannabis in Singapore only.
•  In August 2020, we complied with a written
demand from the Singapore Infocomm Media
Development Authority (IMDA) to remove the film
Have A Good Trip: Adventures in Psychedelics in
Singapore only.
•  In September 2020, we complied with a written
demand from the Radio and Television Supreme
Council (RTUK) in Turkey to remove the film
Cuties in Turkey only.

DATA SECURITY Description of approach to identifying and TC-IM-230a.2

addressing data security risks, including those
of third-party cybersecurity standards

The company has a Vice President of Information

Security who oversees a team of employees
dedicated to information security. We strive to
protect sensitive information through various
means, such as technical safeguards, procedural
requirements and policies, a program of monitoring
to detect and address unauthorized modification
or misuse, continuous testing of aspects of our
security internally and with outside vendors, a
robust incident response program, and regular
training for employees.

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Governance

We operate in a dynamic industry and have been in a state of constant innovation since inception.
We have redefined how people watch video—first through DVD-by-mail, then streaming video, and
now as one of the world’s leading entertainment services with approximately 204 million members in
190 countries. Our success has not gone unnoticed, and we are seeing increasing competition, even
as this dynamic market continues to evolve.

Our corporate governance structure is built against this backdrop. Governance, in this context,
means finding the right balance of rights and responsibilities among stockholders, the Board, and
management, and ensuring that there are appropriate checks and balances in place. With the
rapid evolution of technology and the changing media landscape, we are continually adjusting our
service to meet the dynamic needs and desires of our consumers. Our governance structure is built
to help us to do that. Our focus is on creating long-term value for our stockholders, and we have
been successful at that – since our initial public offering in 2002, annualized total stockholder return
through December 31, 2020 was 40%.

Our governance structure is unconventional. We have several provisions that give our Board and
our management team the freedom to be forward-thinking, such as making investments to build
our own production studios and developing our own animation capabilities, with the confidence that
they will be able to see those investments to fruition. At the same time, we have paid attention to our
stockholders and increased our accountability to them by adopting provisions such as proxy access.
We are proud of our governance structure, both because of how it has supported our success to
date and for being innovative, such as the way that our Board has unfettered access to management
and is able to seek information directly from employees all around the enterprise, which was
highlighted in a 2018 Stanford Study.

We strive to stay in tune with our ownership base. Our Board and our management team engage
directly with our stockholders, and our Board and its committees consider stockholders’ feedback
in assessing our governance structure, including our compensation program. These discussions
provide a good opportunity to share views and answer questions; the input from our stockholders
will continue to inform our ongoing evaluation of our structure.

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Governance

We are committed to managing our business ethically and with integrity. Our Code of Ethics sets out
our expectations for conduct among our employees and Board members. We encourage reporting
of breaches of our Code or any unethical or inappropriate conduct to our Chief Legal Officer or,
in the case of misconduct by a senior financial officer, to the Chair of our Audit Committee. We
also provide access to a third-party operated service where reports of misconduct can be made
confidentially and, if desired, anonymously, 24 hours a day, seven days a week, 365 days a year in
local languages. Reports made through this service are elevated and investigated until they are
resolved, and updates are provided annually to the Audit Committee.

As part of our commitment to managing our business ethically and with integrity, we seek to
identify and mitigate risks that could lead to potential legal and/or regulatory violations. Our Global
Anti-Corruption Policy requires our employees and contractors to abide by global anti-corruption
and anti-bribery laws. We provide regular training on compliance with this policy, in addition to
conducting regular and ongoing risk assessments. A copy of our practices and policies, which
includes the Global Anti-Corruption Policy and Code of Ethics, has been translated into numerous
languages and remains available to all employees throughout their employment with us. Other areas
of focus include commitments to compliance with applicable government mandated sanctions
regimes (with leadership provided by a designated Sanctions Compliance Officer) as well as human
rights legislation (e.g. UK Modern Slavery Act).

We believe our approach to governance will continue to provide the greatest benefit to us and our
stockholders. We realize that elements of our structure may not fit within the standard corporate
governance practices and that some stockholders take a different view. But we believe that our
long-term value is currently best optimized with our approach to governance.

For more information on our governance practices, please visit these links:

•  2020 Proxy Statement

•  Netflix Approach to Corporate Governance - Study by Stanford Graduate School of Business
Corporate Governance Research Initiative
•  Netflix Governance Documents
•  Leadership

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Governance

TOPIC ACCOUNTING METRIC - 2020 SASB CODE

MEDIA & ENTERTAINMENT
INTELLECTUAL Description of approach to ensuring SV-ME-520a.1
PROPERTY intellectual property (IP) protection
PROTECTION &
MEDIA PIRACY We regard our trademarks, service marks, copyrights, patents, domain names, trade
dress, trade secrets, proprietary technologies and similar intellectual property as
important to our success. We use a combination of patent, trademark, copyright,
trade secret laws and confidentiality agreements to protect our proprietary
intellectual property. We employ a variety of methods to monitor potential
infringement of our intellectual property, including searches conducted internally
and by external vendors. A particular focus is preventing uses of our intellectual
property that may lead to consumer fraud.

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